James Venetos, senior portfolio manager at Salomon Smith Barney, agrees. 'If an analyst can't explain what a company does,' Venetos asks, 'how can he explain why the company's earnings and stock will go up?'
If an analyst can't build a case for buying the stock, he
probably doesn't know the company well.
...James Venetos of Smith Barney reads research reports for just those opinions.
About a year ago, he
read a report by Jill Krutick, one of his
company's analysts, who continued to recommend Disney though other analysts argued that the consolidation of Capital Cities/ABC was causing the company to overstate current earnings, which would negatively affect its bottom line.Krutick's report, Venetos
says, cut through the controversy and showed Disney's earnings weren't being exaggerated and that the discussion was not relevant.So he
held on to his
Disney stock and in the last year it has returned 56%. 'If I hadn't read that report,' he
says, 'I might have been swayed by the bears and lost out.'
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